Do Mother Nature’s laws apply to the Sharing Economy?
Technology is slowly but inevitably disrupting every industrial sector and creating a new kind of business model, based on collaboration: the so-called Sharing Economy. However, with Uber’s recent announcement regarding the deployment of self-driving cabs in Pittsburgh, “Uberization” will take on a whole new meaning. Are we witnessing another transformative step within the world economy, or is it something old taking on a new shape (again)?
The Lotka-Volterra model
Vito Volterra, an Italian mathematician and physicist of the early 20th century, faced a curious population dynamics problem. Between 1905 and 1923, the populations of sardines and their predators in the Adriatic Sea seemed to oscillate with a shift in phase. Volterra, a specialist in dynamic systems and differential equations, built an evolution model for these populations and published it in 1926. In the meantime, an American mathematician called Alfred J. Lotka published an equivalent model (in 1924). As a result, the “Lotka-Volterra” model was born.
The model is fairly surprising. In nature, variations in the prey population are almost always proportional to the population of their main predator and vice versa. Logically, when the prey population declines, so does the population of the predator. However, sometimes the trends seem counterintuitive. For example, it has been observed that when the number of Bobcats declined, the population of its prey, the hare, also declined steadily over the following years, while intuitively, we expected an increase. Then, when the predator population starts to increase again, that of its prey also suddenly starts to increase.
Contrary to our expectation, these phenomena turn out to be “ratio-dependent”, not “density-dependent”. These cycles bear a strong resemblance to autocatalytic systems that stabilize themselves, with relationships between predators and prey that run through feedback loops still unknown to us. The Lotka-Volterra model highlighted an intriguing fact to scientists: the predator is the most fragile of the two species in the prey-predator relationship. The threshold below which the number of prey is no longer enough to support the livelihood of the predator is reached much more quickly than the threshold at which the prey is no longer sufficiently numerous to ensure a stable reproduction rate.
Prey and predators
The prey-predator relationship model is now used widely in biology, as well as in several scientific fields. Recently, scientists attempted to adapt it to economics (particularly for market speculation). New areas of application emerged as researchers found correlations between animal populations and human organizations, especially in competitive environments where companies compete for the same customer segments. To this day, no one was able to build a satisfying model to represent business competition based on the Lotka-Volterra model. Even if it appears that a certain degree of competition is essential, economists continue to search for feedback loops and other factors that could better explain how businesses can survive through adapting to market changes.
Having said that, surely competition cannot be the only force that influences the business economy? What if another strong, but underlying force is involved?
Researchers at Champalimaud Centre for the Unknown in Lisbon, Portugal placed rats into pairs and gave one of the rats a choice: open one door to get a chunk of food for yourself, or open another door so both rats receive a reward.
70 percent of the time, the rats made the prosocial choice. Scientists also observed the rats attempting to free a trapped comrade and exhibiting pain and anxiety responses at the sight of another rat in distress. Rats are not the only animal to have each other’s back. Selfless behaviors have been observed or experimented with squirrels, dogs, dolphins, bonobo monkeys, and chimpanzees. Successful species, including humans, seems to be predisposed to cooperation, mutual assistance, and selfless behavior.
Moreover, mutual assistance is not limited to individuals of the same species. Scientists discovered selfless behavior between differing species: whales and seals, birds and monkeys, etc. On top of that, stories of dolphins or dogs rescuing humans are countless. The more we observe, the more collaboration we discover in the natural world. Competition is not the only way species interact.
Competition, collaboration and “coopetition”
A company, as a predator, will always innovate to improve its hunting techniques. On the other hand, consumers — the prey — also innovate to get what they want. To innovate, both businesses and consumers can adopt selfless and prosocial behaviors, collaborate, and share knowledge.
In the barbaric capitalism, the final consumer is a prey. As potential victims, we consider peer-to-peer collaboration and mutual support as a shelter. This is why the Sharing Economy was so quickly and widely accepted by the average consumer — to protect themselves from the big bad wolves, the private companies.
Furthermore, humans are more complicated than that — we are not either prey or predators. A Latin proverb said “homo homini lupus est” — man is a wolf to man.
People are both prey and predators at the same time. We often use our creativity to build tools to switch from the victim to the executioner role.
Today, technology allows anybody to become an entrepreneur, a predator. Technology supports purely selfless behaviors and helps us to act like the dolphins and rats. What technology cannot do, is force us to adopt one particular behavior. Coopetition, collaboration, and competition can coexist. These models are not mutually exclusive, and all of them are closely interrelated.
So if you’re still worried about the predominance of one model or the evolution of our society, bare in mind that the Lotka-Volterra model for prey-predator relationship unveiled the most fragile species: the predator.
I am the CEO of 2PS.com, the very first collaborative network of independent consultants. Our web platform is a matching and scoring tool based on experts’ skills and collaborativeness. It is a network made of real people who are urged to meet on a regular basis. The experience of 2PS network members is your opportunity to access valuable information, especially that which can improve the efficiency of your business. That is why we carefully select our members and make sure that information is readily available to our customers, wherever possible.
If you want to join the 2PS network of experts, please visit http://2ps.com/a/about-us